WASHINGTON, United States - Chinese-owned online retailer Temu is suing its rival Shein in the United States, accusing it of "mafia-style" intimidation tactics to keep the upper hand in the US market.

In the lawsuit, filed on Wednesday in a federal court in Washington DC, Temu accuses Shein of threatening merchants against doing business with its rival and a list of other allegations.

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"While each component of Shein’s conduct is unlawful in its own right, taken together they form an anticompetitive scheme and abuse of power," the lawsuit said.

The legal onslaught from a fellow Chinese-founded company comes as Shein has begun work towards a US-based IPO that could take place next year.

Chinese-founded Shein, which is officially based in Singapore, is known for selling enormous amounts of clothing stock for extremely low prices in countries around the world.

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Both companies have made big inroads in the United States and are seen as upstart rivals to Amazon.

Shein was valued at $66 billion earlier this year and has reportedly recorded $23 billion in revenue and $800 million in net profit in 2022 and has told investors it has posted new records in 2023.

The two companies have filed tit-for-tat lawsuits in the US before, but those were settled before going to trial earlier this year.

Founded in 2008 in China, Shein has quickly conquered the global fast fashion market by selling its products exclusively online and catering to young customers through social media.

It has been accused of exploiting unpaid labor, obscuring production processes and encouraging overconsumption as it has faced the wrath of environmental and human rights activists.

Temu has topped US app download rankings at various moments this year and is positioned as an Amazon-like superstore, selling everything from make-up to homeware and electronics.

Its quiet launch last year marked Chinese e-commerce giant Pinduoduo's first foray into the US market.

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